Custody

ZenGo raises $4M to bring ‘keyless’ crypto wallets to mainstream users

Quick Take

  • ZenGo is a crypto mobile wallet that has raised $4 million
  • The wallet uses a cryptographic technique called threshold signatures to create a secure and easy-to-use transaction process  

ZenGo wants to make storing and managing cryptocurrencies less intimidating for the average user. The firm has raised $4 million from investors including Benson Oak Ventures, Samsung, and Elron.

While the message “not your key, not your bitcoin” is frequently repeated throughout the cryptoverse, many are still reminded of the stories of individuals accidentally throwing away their bitcoin-filled hard drives or having their life savings stolen from exploited hardware wallets.

But the process of having to write down a private key and safely store it might be too much of a hassle for your average Joe to get into crypto. Enter ZenGo; a mobile crypto wallet leveraging a unique cryptographic protocol to provide security and ease of use.

The technology powering ZenGo’s system is threshold signatures —similar to multi-sig. With threshold signatures, multiple parties must cooperate to initiate a crypto transaction. According to ZenGo “instead of using a traditional private key, the message is signed using a public key and multiple secret shares held by the participating parties.”

The ZenGo system uses a two-of-two signature system, requiring two “shares”, one from the user and one from ZenGo, to send a transaction. An encrypted copy of a share is stored on ZenGo’s server, while the decryption code is stored on the user’s iCloud account.

The signing process all happens in the backend. If a ZenGo user wants to send transactions they only need to scan their face, via Apple’s FaceID feature, which will signal ZenGo’s servers to send over the encrypted share for signing.

Sending a transaction on ZenGo

“Sending crypto is like sending a message…Its deeply human and I cared about making that experience more human,” CEO Ouriel Ohayon tells The Block. “As I learned about it [crypto] I was shocked by how prehistorical solutions were…even the best ones.”

While ZenGo is currently in private beta, when it publicly launches it will face an uphill battle, due to the influx of various crypto custody providers. In fact, more recently, crypto custody provider Casa announced the launch of Keymaster, its mobile app offering similar technologies used by ZenGo. While Casa’s product is similar, there are two important differences:

  • Casa only supports bitcoin and uses multi-signature while ZenGo is blockchain agnostic and uses threshold signatures
  • Casa uses passwords while ZenGo doesn’t

There is also a concern about what happens if ZenGo’s server shuts down. Ohayon tells The Block that when ZenGo launches, the firm plans on hiring an independent trustee to trigger a share recovery process and allow ZenGo’s users to continue using its service. Additionally, because ZenGo uses facial verification, there is also a potential for an attacker to trick Face ID into signing a transaction without users’ knowledge. Ohayon, however, is not deterred, telling The Block that ZenGo’s tech is “spoof free.”